Small business trends to look out in 2021

 This year, keep an eye on these small business forecasts and trends.

COVID-19-related lending services will be critical, but they will not be sufficient. In order to meet the capital needs of business owners in 2021, alternative sources of financing will be needed.

As conventional marketing and public relations undergo a makeover in 2021, digital marketing spend is expected to rise.

As the COVID-19 pandemic drags on into 2021, small businesses will fuel adoption of emerging technologies, and AR/VR will shine.

This article is for business owners who want to make the most of the new year by capitalizing on market trends and forecasts.

After a successful year in 2020, small businesses anticipate a better year in 2021. Although the COVID-19 pandemic has not yet passed for companies across the United States, vaccine delivery has boosted optimism. Despite the fact that the pandemic has been front and center since early last year, there are other developments for entrepreneurs to keep an eye on.

Business News Daily spoke with experts in economics, marketing, technology, and human resources to learn what to expect in 2021 for small businesses and how to capitalize on these trends.

Investing

Many small businesses would profit from the Paycheck Protection Program.

Many companies' cash reserves have been exhausted as a result of the COVID-19 pandemic's economic effects. Despite the fact that many states have reopened after initial shutdowns, others are reimposing sanctions, reigniting fears about cash flow and small business survival. The Paycheck Protection Program (PPP), which was developed last year under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, received additional funding in the recent $900 billion stimulus bill.

Courtney Lawless, venture capitalist and co-host of the Amazon Prime series Wolf PAC, said, "Small companies should want to take advantage of the new stimulus bill, like [applying for] a new PPP [loan]."

Depending on how you use the money, the PPP loan can be forgiven later. Learn more about the new round of funding for the PPP loan program in this report.

Unmet funding needs will be filled by alternative sources of money.

Many other business owners might not be able to take out loans, particularly if they suffered major financial losses as a result of the COVID-19 pandemic. Alternative funding sources, such as alternative lenders or investors, can be crucial in obtaining much-needed funding for many entrepreneurs in these situations.

"Alternative sources of funding would almost certainly play a key role in keeping companies afloat," Lawless predicted. "Grants, fintech, venture capital, angel investors, peer-to-peer lending, and crowdfunding are only a few examples of alternative funding outlets. Because of the negative effect [the COVID-19 pandemic] has had on their balance sheets, many companies who currently need capital would be unable to meet the requirements of conventional funding sources."

The amount of money spent on social media marketing will rise.

With billions of users between them, it's no wonder that advertisers are increasingly focusing their efforts on social media sites. The rapid expansion isn't going to slow down in 2021. According to Finaria's estimates, social media ad spending will rise by 15% in 2021, bringing the total amount spent on social media advertising to $105 billion. That's almost double the overall social media ad spend of $54.4 billion in 2017.

" "Everyone was forced to reduce their reliance on conventional offline marketing." They were compelled to go digital, and many of them are pleased with the results.

Although social media advertising is becoming more common, it is also becoming more competitive. To create an audience and brand recognition, small businesses should take a multichannel organic approach.

Traditional media outlets will see a spike in paid placement ads.

Spending on paid placement ads in the United States increased from $4.75 billion to $11.44 billion from 2012 to 2019, according to Zoldan, and this trend is expected to continue in 2021. Furthermore, the distinction between sponsored and non-sponsored content is likely to blur, as consumers clearly prefer authenticity to advertising, according to him.

"I believe we'll see a lot of paying placement in conventional media because earned media is extremely difficult to come by," Zoldan said. "It will be difficult to say the difference between paid and earned placements because paid placements will be rather immersive and video-centric."

Investing in multimedia can yield a higher return on investment than traditional news releases.

Press releases are becoming less successful, in part due to the difficulty of obtaining earned media, according to Zoldan. Rather than sending text-based updates to media outlets in the hopes of being released, brands are more likely to carry press releases in-house and generate video notifications of newsworthy company developments.

 Science and technology

Digital reality and augmented reality are coming into their own.

Though augmented reality (AR) and virtual reality (VR) have been common for a while, 2021 may be the year they break new ground in terms of business adoption. Best of all, small companies will be the first to capitalize on the trend.

"It's extremely strong, particularly during a pandemic," said Joe Apfelbaum, founder and CEO of B2B marketing firm Ajax Union. "You should go to VR networking events right now if you want to go to networking events.

Personalization will be fueled by AI and big data.

Artificial intelligence (AI) and data analytics are two other innovations that companies can't ignore. These two technologies are a perfect fit, allowing companies to gather large amounts of data while still using machine learning to make sense of it. Businesses may use the information gained in this way to better target marketing efforts or identify new efficiencies in internal processes.

"Because you know what your customers want in a consistent way, you can use it to build a personalized user experience."

Small companies will be at the forefront of emerging technology adoption.

According to Apfelbaum, a popular misconception about developing technology is that it is the domain of large corporations. Apfelbaum, on the other hand, believes the opposite is real.

"If a new technology comes out and you're a small company, you can introduce it right away," he said. "A large corporation would test and test, and once they've tested and set it up, they don't want to adjust everything because they've spent too much."

Human resources are important.

With the change of guard in the White House, the world of human resources may undergo dramatic changes, according to Aaron Holt, a labor and jobs attorney at Cozen O'Connor. This could lead to policy changes that affect companies of all sizes.

The minimum wage in the United States will be increased.

The federal minimum wage hasn't been increased in more than a decade, and Biden's campaign agenda included a significant rise.